By Jaimie Kaffash
6 December 2010
Government claims of a ‘broken’ welfare system ‘do not stack up’, according to a leading academic.
Paul Gregg, a professor at the Centre for Market and Public Organisation at the University of Bristol, has refuted government claims that welfare spending is ‘out of control’. Although ministers are right in saying that there has been a real-terms increase in spending over the past ten years, this is a relatively stable figure compared with increases over the past 50 years.
Writing in the university’s Research in Public Policy journal, he says that the introduction of the Universal Credit – which will comprise a single payment for claimants to replace the various benefits given now – will ‘result in a large number of losers even with substantial extra costs to the Treasury’. It could even lead to a more complex system, he writes.
‘In terms of worklessness leading to a reliance on welfare, the picture is not of a broken system. Rather, it is of a system that has been steadily improving since 1995 but masked by the current recession,’ he says.
‘Government claims of a broken welfare system and spending out of control simply do not stack up. They are more the hyperbole that politicians use to motivate change rather than a depiction of reality.’
The research says a 40% increase in real-terms welfare spending over ten years is standard. The only time in the past 50 years that it was below 40% was between 2001 and 2008.
‘It is less out of control than at any time since the Second World War,’ he adds.
Gregg says that the current number of people claiming unemployment benefits is 5 million, up from 4 million before the recession. However, this is down from the end of the ‘milder recession’ of the 1990s, when there were 6 million claimants.
He also criticises the proposals for a Universal Credit. Many of the current benefits are supplements for additional costs, such as Housing Benefit, Council Tax Benefit, Disability Living Allowance and Attendance Allowance, that do not apply to all claimants.
‘A single Universal Credit would not be high enough to meet these additional costs unless it was very generous and thus prohibitively costly,’ he says.
